Monthly Archives: July 2006

andrew sullivan reminds us that more people died in iraq in the last two weeks than in lebanon and israel combined, and that conditions in the middle east continue to deteriorate. he notes that william buckley is sour:

Don’t rely on me. Ask William Buckley, the father of American conservatism, an intellectual pioneer who almost singlehandedly created the conservative movement that gave us the presidencies of Reagan, Bush and Bush. “I think Mr Bush faces a singular problem best defined, I think, as the absence of effective conservative ideology,” Buckley told CBS last week, “with the result that he ended up being very extravagant in domestic spending . . . and in respect of foreign policy, incapable of bringing together such forces as apparently were necessary to conclude the Iraq challenge.” Buckley has described the Iraq venture as failed, adding to the conservative chorus of dismay at Bush.

The US military, in response to what can only be called anarchy, announced a new deployment of US troops to the capital city. Stephen Hadley, the national security adviser, described this latest manoeuvre as “phase 2” of the previous effort to stabilise Baghdad. The only problem, as other Bush officials conceded to The New York Times off the record, is that there was never a phase 2 in the original plan. “This is more like plan B,” anonymous colleagues explained.

“Six weeks ago we were talking about pulling American troops back from the city streets, not putting more of them out there.”

he calls bush bewildered, which i think is the perfect adjective to describe him at the bush/blair press conference, and notes it would be difficult for rumsfeld to be any more detached.

just when i was beginning to think the american people had come to their senses, with polls reflecting a majority now recognize
the country has been steered astray, i now see the very real threat
that the united states will be pushed into war with iran. jerry falwell
has an organization called the christians united for israel, and they
believe it’s just like 1938 in the middle east, and the new hitler is ahmedinejad in iran.

One speaker after another kept the focus on Islamo-fascism and Iran in
particular. Republican Party chairman Ken Mehlman noted that no country is more
feared by its Arab neighbors than Iran and called Iran the center of global
jihadism. Pennsylvania Sen. Rick Santorum said, “It is time for the United
States to stand with Israel and to go to the heart of the problem, which is
Iran.” Multiple speakers compared Iranian President Mahmoud Ahmadinejad to
Hitler. Texas pastor and televangelist John Hagee, who founded Christians
United for Israel, said, “The ghost of Hitler is walking across Europe and
the Middle East.”

Hagee called the president of Iran “a new Hitler,” who
“intends to develop nuclear weapons to attack Israel and the United
States.”

“It’s almost like we’re in 1938 again. I always wondered
what I’d do,” said Greg Stephens, a delegate and San Diego
pastor.

i went to israel six years ago, and loved the country and the people i met there. at one point ari, who was our guide, pointed out a fairly unremarkable hill and said that is tel megiddo, also known as har megiddo, popularly known as armageddon. it is, and i am guessing here, about 50 miles south of lebanon, near nazareth. if you believe in the book of revelations, it’s possible that all the missiles and bombs and shooting in that neighborhood are causing you to wonder if this is really it, the big one.

Christian evangelical support for Israel has sometimes been criticized
as springing from an end times theology that sees the state of Israel as a
precondition for the onset of Armageddon. While acknowledging that their
support for Israel is biblically based, leaders shrugged off questions about
that.

“If you’re worried about the end of times, you need to focus
on President Ahmadinejad,” said Bauer.

His return will be preceded by cosmic chaos, war and
bloodshed. After a cataclysmic confrontation with evil and darkness,
the Mahdi will lead the world to an era of universal peace.

This
is similar to the Christian vision of the Apocalypse. Indeed, the
Hidden Imam is expected to return in the company of Jesus.

Mr
Ahmadinejad appears to believe that these events are close at hand and
that ordinary mortals can influence the divine timetable.

president bush makes no secret of his strong faith in evangelical christianity, and the pastors that gathered last week are going to return home to spread the word. the united states must stand strong behind israel. there is a new hitler, and he is the leader of iran. iran is controlling hezbollah. the end of days may be upon us.

i respect others’ beliefs just as i would have them respect mine. my belief is that if we open another front in iran, which is to say engage in the occupation of yet another country, it really will be the end of days for this crumbling empire, a self-fulfilling prophecy. if these people are successful in drawing us into an even larger war, the economy, social structure, and system of government will go to hell. dramatically more so than it already has been taken there.

and if jesus christ and mahdi and elijah with the messiah don’t happen to show up after world war III, it’s gonna be a bitch for us mortals to put things back together again.

some idiot is wailing my inbox about 30 times a day with stock spam, the latest for GDKI.PK. here it is over on spamnation. the information available is sketchy, and the yahoo finance chart isn’t printing properly, but the intense pump and dump action needs a bad porn music soundtrack. according to the FAQ over at spamnation, this kind of a scam is usually perpetrated by some third party and not the company itself.

the pressure to rack up the big returns at those hedge funds must be intense these days! thanks, whoever you are, for giving me a list of stocks to steer clear of. here’s someone who created a tracking portfolio out of stock spam he received.

i was just reading a market summary that is behind a firewall so i’m not linking to it, when i ran across a sentence that i have been seeing repeatedly (in my bold):

The market continues to eye developments in the Middle East. Israel says it plans to secure its border with Lebanon by creating a buffer “security” zone that will stay in place until an international force can be deployed, the BBC reported, quoting Israeli Defense Minister Amir Peretz.

“We have no other option. We have to build a new security strip that will be a cover for our forces,” said Peretz. His remarks come as U.S. Secretary of State Condoleezza Rice continues her diplomatic push for peace in the region.

the thing that is confusing to me is that she keeps stating that she is not there to make peace. it is the united states’ express position that this bloodbath will end when israel’s conditions are met, and no sooner. the conditions keep broadening too, as she is states that she doesn’t want a return to “the status quo”. that isn’t a diplomatic push for peace by any definition:

The fighting came as Secretary of State Condoleezza Rice
arrived in the region, making an unannounced stop in Beirut, where she
met Lebanon’s prime minister, Fouad Siniora. Ms. Rice expressed concern
for Lebanese suffering, and the United States said it would give $30
million to aid in the country’s recovery. “Thank you for your courage
and steadfastness,” she told Mr. Siniora.

But the visit was
tense. Mr. Siniora angrily described the damage to his country,
including about 380 people killed and some 750,000 displaced, and,
according to a statement released by his office, said the Israeli
bombing had set Lebanon back “50 years.”

Ms. Rice said
Washington would support a cease-fire once Hezbollah freed two Israeli
soldiers taken captive 13 days ago and pulled back from the border with
Israel, said C. David Welch, the assistant secretary of state for Near
East affairs.

She repeated the message in a later meeting with
an emotional Nabih Berri, the speaker of Parliament and a Hezbollah
ally and presumed intermediary, who insisted that a cease-fire come
first, and then a prisoner exchange.

so, why write that condi is there to make peace when she quite clearly is not? because it sounds good?

i sold dell today at a 6.8% profit. the more i read about it and talked with people over the weekend, the less excited i was for the trade to become an investment. i wasn’t particularly good with the timing of the sale either, this morning it was up over 8% from where i bought it, but i was hemming and hawing a bit weighing the decision.

i bought back into PHO today, the powershares water resources ETF. i had bought it earlier in the year for a runup, and then when it turned around on may 10 with everything else i got out at a fractional loss. i’m probably early getting back into it, but i am still confident that water is one of the bigger stories out there. i also think that the utility constituents of the palisades water index should start getting a lift at some point as the tightening cycle pauses or ends and the economy shows more signs of slowing. the risk there is oil prices, because most utilities are energy intensive. i suppose i am “hedged” against that by penn west (PWE). i received those shares in a buyout of the petrofund canada i had.

my gut tells me i should think about buying puts on the QQQQ on days like this. i’m not complaining, mind you. everything is green on my screen right now. sandisk announces at 3PM¬† the close, and i sure hope they have some happy things to say about the next two quarters.

i’ve been reading fred wilson’s blog for a while, and just read his post encouraging people to add a category for stocks, and hooked it up here. i like his idea of aggregating these stock related posts somewhere, although being a heavy consumer of stock related feeds i think it would be challenging to make sense of all that’s out there. reading a lot of posts about breakouts on 5 times average volume or eliot wave patterns aligning with jupiter (ok i’m being facetious) is not going to be that useful if you are ben graham disciple. or possibly it will. i have learned a huge amount about different approaches to trading and investing reading the hundred or so stock-related feeds i follow daily.

i have been messing around with stocktickr lately as well. i’m seacaptain on there. i just threw some random stocks in there when i first signed up and haven’t edited my portfolio there, so don’t wail me about my performance. it’s a bit more of a TA and momentum crowd, but the germ of an idea is there for using social and trusted network tools for stock selection and personal finance. i have a pretty good idea of the app i would like to build, or would like to see built so that i could use it. but i think i’m going to keep that one in stealth mode for now.

It is time to tell an inconvenient truth about Iraq: it is an
occupation, not a war. In wars, armies fight to dominate land. The US
won the war three years ago when Bush said, ‚ÄúMission Accomplished‚Äù.
Then the occupation started, and our troops were not trained or
equipped for an occupation under predictably hostile circumstances.
Finally getting the courage to tell the truth that the US is an
occupying force drastically changes the picture in Iraq. You cannot
‚Äúwin‚Äù an occupation. ‚ÄúCut and run‚Äù does not apply to an occupation.

here’s a stock story that you might be a little hesitant to share with your more narrowly-minded liberal friends. the economy is slowing, and times are getting tougher. real wages are going nowhere. central bankers around the world are pulling liquidity out of the markets trying to keep ahead of inflation. stagflation and/or recession seem well within the realm of possibility in the next 6 to 12 months. in more difficult economic times, people generally behave a little more badly. they steal, they break things, they get drunk, tempers flare. they get mad at illegal immigrants who they perceive as the source of their employment woes.
how do you capitalize on this emerging trend you ask? well luckily the private sector is lending a big hand to uncle sam by incarcerating people more efficiently than the government can. right now, they are making a KILLING on all this illegal immigrant hysteria. business is BOOMING!

By the fall of 2007, the administration expects that about 27,500 immigrants will be in detention each night, an increase of 6,700 over the current number in custody. At the average cost these days of $95 a night, that adds up to an estimated total annual cost of nearly $1 billion.

[...]

Wall Street has taken notice of the potential growth in the industry. The stock of Corrections Corp. has climbed to $53.77 from $42.50, an increase of about 27 percent, since February when President Bush proposed adding to spending on immigrant detention.

Geo‚Äôs stock rose about 68 percent in the period, to $39.24 a share from $23.36.

the bread and butter are still regular old prisoners, but the margin on illegal immigrants is pretty sweet. in the following excerpt from the article i have bolded a sentence that i feel indicates the possibility for exponential growth in the event of some sudden “market event”:

While the companies would not comment on profit margins from their
immigration business, Wall Street analysts said that detention centers
produce profit margins of more than 20 percent.

That compares with margins in the mid-teens for traditional prison management, they
said, because prisoners are provided with more costly services like
high school degree programs and recreational activities.

Even with the expected growth in the number of immigrant detainees, the main
source of income for the private prison companies will continue to be
revenue from state and federal governments for housing regular inmates.

The state and local prison population totaled more than 1.5
million last year, with about 100,000 of those held in privately
managed prisons. But the number of state and federal inmates rose by
just 1.4 percent from June 2004 to June 2005, slower growth than the
average 4.3 percent annual increases from 1995 to 2000.

By contrast, the number of immigrants in detention is expected to increase
by about 20 percent over the next three months alone.

Federal immigration contracts generated about $95.2 million, or 8 percent, of
Correction Corp.‚Äôs $1.19 billion in revenue last year, and about $30.6
million, or 5 percent, of Geo‚Äôs $612 million total income.

In the first quarter of 2006, Corrections Corp.‚Äôs detention revenue rose
to $25.5 million. The federal immigration agency is now the company‚Äôs
third-largest customer, after the federal Bureau of Prisons and the
United States Marshals Service.

The detention market is projected to increase by $200 million to $250 million over the next 12
to 18 months, according to Patrick Swindle, a managing director at
Avondale L.L.C., an investment banking firm that has done business with
both Geo and Corrections Corp. He said that a company‚Äôs capacity would
play an important role in how much of the market it would be able to
capture.

The company ‚Äúcurrently has 4,000 empty beds in their system,‚Äù Mr. Swindle said. ‚ÄúThey are bringing on an additional 1,500 beds within the border region.‚Äô‚Äô

‚ÄúReasonably, about 3,000 to 4,000 beds could be made available‚Äù for immigrant detention, he said.

Having empty cell space that can be made available quickly is
considered an advantage in the industry since the government‚Äôs need for
prison space is often immediate and unpredictable. Decisions about
where to detain an immigrant are based on what is nearby and available.
Immigration officials consider the logistics and cost of transportation
to the detention center and out of the country.

i picked up some yahoo yesterday and some dell today. i added a new yahoo finance badge in the sidebar, if you scroll down a ways, that shows most of the stocks i own. i am not quite at the point where i put it all up there, the number of shares, the performance, etc., although that is where i am headed. as a caveat, i am over 80% in cash right now, and believe there is likely more pain yet to come in the market. it is a bear market until proved otherwise at this point. taking small positions in mega-companies that have just gotten over-hammered seems less risky than other strategies at this point. besides, i really like this dell monitor i have and although yahoo pisses me off occasionally (think sbc/yahoo and their recent privacy policy changes) i use their services every day. no groundbreaking strategy here. these are pretty pedestrian trades, just picking up some poor slapped-up tech stocks to keep another recent acquisition, sandisk, company. the slaps continue to come for SNDK today, hopefully their guidance on monday will turn things around.

i started dabbling in t-bills a couple weeks ago. i haven’t bought treasuries before (i might be wrong about that, i am remembering some kind of bank product i had as a teenager), but they have made it painless with treasury direct. i set up the account in january but left it alone until now. bond prices have moved steadily up since i ordered on the 7th. (you place an order and it gets filled at the next auction). i don’t anticipate buying many treasuries, it is more like an experiment, and i really don’t see myself trading in and out of bond positions.

i guess in a way i really do get a rush from consumerism, it’s just that i get way more of a rush out of buying things i believe are going to appreciate in value. with exceptions made for computers, consumer electronics, and boats of course.

bret and kevin ward are going to be driving from new york to los angeles in the bull run this coming week, in a fully blown out 650 HP, 200+ MPH studebaker (built by my dad’s friend john ward, a legend). he is going to post, and i will be posting updates as he calls in from the highway. the car is insanely loud, i am wondering how they will even get the thing out of manhattan without getting pulled over, or, as our friend david hamburger said this morning, “blowing out the glass on the eighth floor of some downtown building”.